1. Massachusetts Health Reform A Social Compact for Shared Responsibility State Coverage Initiatives January 26, 2007 Christie L. Hager, J.D., M.P.H. Chief Health Counsel Office of Speaker Salvatore F. DiMasi

2. State Coverage Initiatives January 26, 2007 “ Voluntary association of individuals…... all shall be governed by certain laws for the common good.” Social Compact Source: Preamble, Constitution of the Commonwealth of Massachusetts

3. State Coverage Initiatives January 26, 2007 Health Reform by the Numbers Sections of Chapter 58 of the Acts of 2006.....147 Chapters of the MGL amended…………..……22 State entities affected or created…....................19 Residents of the Commonwealth expected to become insured over the next 3 years.......515,000

4. State Coverage Initiatives January 26, 2007 –MassHealth Expansion and Restorations –Subsidized Health Insurance ― Commonwealth Care Health Insurance Program ― Commonwealth Health Insurance Connector –Uncompensated Care Pool / Health Safety Net –Medicaid Provider Reimbursement –Quality and Cost-Effectiveness –Private Health Insurance Market Reforms –Employer Responsibility –Individual Mandate –Public Health –Health Disparities Chapter 58 of the Acts of 2006

5. State Coverage Initiatives January 26, 2007 Employer Responsibility  Fair Share Contribution  Section 125 “cafeteria plan”  Free Rider Surcharge  Health Insurance Responsibility Disclosure  Anti-discrimination in offer

6. State Coverage Initiatives January 26, 2007 Fair Share Contribution  “ Fair and reasonable” premium contribution defined and calculated by Division of Health Care Finance and Policy  Collected by Division of Unemployment Assistance

7. State Coverage Initiatives January 26, 2007 Section 125 Cafeteria Plan 1 Offer  Effective January 1, 2007  Section 125 cafeteria plan to be filed with the Connector  AG enforcement and authority to seek injunctive relief  Proposed regulations expected February 1 26 USC 125

8. State Coverage Initiatives January 26, 2007 Free Rider Surcharge # of Employee free care visits per year # of Employees 4-6 (1 employee) OR 5-10 (all employees) 7-14 OR 11-20 >15 OR >20 11-20 10%20%30%40% 21-35 15%25%35%45% 36-50 20%30%40%50% >50 25%35%45%55% If no 125 offer AND Employee or dependent uses free care 3x in a single year OR Employer has aggregate of 5 or more uses in a single year: Non-compliance with HIRD requirement OR second successive year of surcharge

9. State Coverage Initiatives January 26, 2007 Individual Responsibility  Effective July 1, 2007  Affordability schedule set by Connector  Penalty in tax year ’07 - loss of personal exemption  Penalty in tax year ’08 + - 50% of monthly affordable premium  Religious and hardship exemptions  Appeals through Connector  Health Insurance Responsibility Disclosure

10. State Coverage Initiatives January 26, 2007 Commonwealth Health Insurance Connector Authority www.mass.gov/connector

11. State Coverage Initiatives January 26, 2007 Commonwealth Care Health Insurance Program  Sliding-scale subsidies to individuals with incomes below 300% FPL ($29,400 for an individual; $49,800 for a family of 3)  No premiums for people with incomes below 100% FPL ($9,800 for an individual)  No deductibles  Comprehensive benefits

12. State Coverage Initiatives January 26, 2007 Connector Determinations  Affordable products for >300% FPL (Commonwealth Choice)  Minimum Creditable Coverage  Definition of affordability  Waiver and appeals process

13. State Coverage Initiatives January 26, 2007 Implementation Timeline

14. State Coverage Initiatives January 26, 2007 Individual Mandate (>600% FPL) Affordable Products for non- CCHIP (301-600% FPL) MassHealth Expansion Commonwealth Care (≤300% FPL) Coverage Estimates